Being a guarantor - don't do it!!

Very good advice Anniepa. I was told I could be a guarantor for the fees at my mother’s care home if her money ran out! I told the person I’m not a position to pay thousands of pounds to a care home, what if I needed care myself in the future? We found another care home for mum, a lovely home, where when her money runs out the local authority will take over the costs, they don’t expect me to use up any money I may have to fund my mother’s care.

maddyone

Very good advice Anniepa. I was told I could be a guarantor for the fees at my mother’s care home if her money ran out! I told the person I’m not a position to pay thousands of pounds to a care home, what if I needed care myself in the future? We found another care home for mum, a lovely home, where when her money runs out the local authority will take over the costs, they don’t expect me to use up any money I may have to fund my mother’s care.

Wow - why would anyone do that in any circumstances ? There is no legal obligation for family to fund anyone’s care and it’s recipe for financial ruin given the costs involved. An aunt of ours was self funding in a beautiful care home and was devastated to find that when her money was exhausted she would have to move as the council would not fund that particular home. She was persuaded to move before the funding ran out, and we too managed to find a decent alternative for her. At over £4000 a month, the proceeds of the average home sale don’t provide for more than around five years of care. A sobering thought.

Very risky. Engage brain before signing this kind of guarantee.

Don’t understand this ….I was guarantor to my daughter and son when they first got a rented flat….only lasted 18 months and that was end of it!!!

I work for a lettings/estate agents, you can obtain consent from the landlord to step down as guarantor. They may agree on the proviso that another guarantor is provided, or if your step-daughter has been there a while and as you say, there have been no problems, the landlord may well agree she doesn't need to find a replacement. Equally they could withhold consent, you just need to ask the question.

Was guarantor for my son for one year. Their staff automatically signed me up for year 2 without my consent. I removed myself as guarantor at that point. They refused to accept this. I asked them to send me written proof with my signature for year 2. I'm still waiting to hear from them and that was 7 years ago. There is nothing on my credit rating about it at all. If they put up the rent a new contract must be signed again. Advise to send a letter recorded delivery stating you are terminating the agreement as guarantor as circumstances have changed. Keep a copy. Surely your offspring are now old enough not to need one especially if they have always paid.

Long ago I had neighbours who guaranteed a loan made to their daughter. In the end they had to sell their home, when the daughter couldn't make the necessary repayments. The daughter will have greatly regretted this herself, as did her parents, of course. It does merit careful thought in advance.

Anniepa

After 10 years of being a guarantor for my step daughter's rent I am now in a position where I could not afford to pay out if she did not pay. Tbh this situation has not arisen and there is a reasonable chance that it won't in the future however now that I am a pensioner I would like to remove that worry from my life but find out that I can't. Once you sign up to be a guarantor you are stuck unless another guarantor can be found - which in this case is not going to happen. Please don't get yourself in this position however much you would like to help out.

surely if you want to end it and the landlord won't play ball then the step daughter must move?

Anniepa, have you checked the legal side of this. I believe you can remove yourself at the end of the tenancy or the period of the tenancy that has "rolled on". We had a tenant who we asked for a guarantor and this is what we were told as Landlords. As far as I understood it, you only signed up for the original period.

LtEve

I'm a guarantor for my sons rented flat as is his girlfriends Mother. I've never had to bail him out ever and it's not a high rent so between the two Mums we could manage it if it was ever necessary. I do know he is saving very sensibly so I'm not worried. The only reason he needed one was because he had no credit rating as he's never owed anything and hadn't got even a credit card and has never been overdrawn. A good deal more sensible with money than I was at his age!

I was in this exact situation about ten years ago with my son. I acted as guarantor for him.

I didn't realise at the time that this was a long term thing. I thought it was only applicable until he had been in the flat long enough to prove that he would be able to pay the rent.

He had never rented before and didn't have any references.

We never had an issue with it. He now has his own house.

I wouldn't do it if I thought non payment might be a possibility and I certainly wouldn't do it for anyone other than one of my children.

I would have thought that a new tenancy agreement was overdue on this - guaranteeing somebody else's rent for 10 years seems rather excessive!!

Oh Crickey! I never thought about it being a permanent thing you’d be stuck with tbh.
I thought it would be for a set period of time, like a year or so. How old is your d SD?

About 40 years ago our neighbour’s son was furious as my dad refused to be a guarantor for a motorbike loan. His own dad was an absolute chancer who my dad used to say “neither worked nor wanted”.

Like many parents I've acted as guarantor for DD and DS when they were students but I was unaware of the long term commitment. Thankfully both now have the necessary financial track records to not need my help any more.

A friend's nephew recently lost a flat he planned to rent with his fiance due to the guarantor changing their mind last minute. They are about to become homeless and are struggling to find somewhere to go. I'd considered offering to be guarantor but probably glad I didn't now, though I would like to help. My friend was turned down as a guarantor as her business was badly affected by the pandemic so their finances are a bit precarious. However when I acted as guarantor no checks were made to see if I could afford to offer to be one. Have the rules changed in the last few years or does it just depend how thorough the letting agency /landlord are?

PinkCosmos I'm sure they'll move to somewhere a bit bigger at some point as their flat is tiny and hopefully won't need a guarantor by then. I've been in the slightly odd position of advising him to get a credit card as it will give him a credit rating, he's always been someone who saves for anything he wants, we must have done something right as parents!

Read the guarantee document very carefully and preferably take legal advice. It is very easy to think you understand it but not really be aware of the possible repercussions. As is obvious from some of the replies above. That's what solicitors are for. Better to pay a modest legal fee and sleep at night.
If there is more than one guarantor their liability may be joint and several - i.e. either of them can be required to pay the full amount due, not only half if it.
During the course of my career I advised a number of women on the possible implications of guaranteeing their husbands' business liabilities. A number of jaws dropped to the floor as what might be on the line had been misrepresented to them. I imagine a number of very difficult conversations were subsequently held behind closed doors.

As others have said it would be a good idea to get legal advice.
here are two sites that explaine most of the law on being a guarnntor
england.shelter.org.uk/professional_resources/legal/costs_of_renting/guarantors#title-0

www.citizensadvice.org.uk/housing/renting-a-home/using-a-guarantor/

I was asked to do this. We asked the question how long it would take for the renter to be deemed a trustworthy tenant and a term of only two years was agreed. So after two years I was no longer liable for any non rent payment. Perhaps a chat with the letting agent or landlord would give you peace of mind.

babzi

Was guarantor for my son for one year. Their staff automatically signed me up for year 2 without my consent. I removed myself as guarantor at that point. They refused to accept this. I asked them to send me written proof with my signature for year 2. I'm still waiting to hear from them and that was 7 years ago. There is nothing on my credit rating about it at all. If they put up the rent a new contract must be signed again. Advise to send a letter recorded delivery stating you are terminating the agreement as guarantor as circumstances have changed. Keep a copy. Surely your offspring are now old enough not to need one especially if they have always paid.

If you could prove you were signed up without your consent, then hopefully it wouldn’t have been enforceable. But as the norm, before agreeing to be a guarantor for someone renting a property, you should always check the conditions as if there is no specified ‘get out clause’ or agreed timescale, liability will remain until either the landlord agrees to terminate the agreement or the tenancy comes to an end. Things like rent rises, lease renewals or any other changes do not release a guarantor from liability unless they are specifically written into the contract and the guarantor has no legal right to terminate it themselves.

esgt1967

I would have thought that a new tenancy agreement was overdue on this - guaranteeing somebody else's rent for 10 years seems rather excessive!!

A new tenancy agreement wouldn’t end the guarantors’ liability unless the contract they signed specifically states that. Usually the contract is valid until the tenancy comes to an end unless otherwise stated.

It entirely depends on the wording of the guarantee Pammiel. Impossible to say what the situation is without studying the document.